Cornelia Gomez, Global Head of ESG & Sustainability at General Atlantic (picture), Zomo Fisher, Head of Sustainability & ESG at Hellman & Friedman, and Elin Ljung, Head of Communications & Sustainability at Nordic Capital was the excellent speakers who took the time to share their insights and practices.
Photo: Johan Olsson
The event held in Stockholm in September sought to gather GP representatives from AP6’s portfolio to explore social sustainability factors’ increased importance in private equity investing and sharing practical approaches to human rights due diligence.
The level of engagement and the high interest in the topic provided for great discussions and opportunities to advance industry practice relating to human rights. Building upon AP6’s recent pilot Human Rights Assessment, fund managers that AP6 invests with were invited to share practical approaches to human rights due diligence as investors in buyout, venture, and growth. Fuelled by the presentations of some of the fund managers that had participated in the pilot study, participants discussed real-life practice, challenges and work arounds in two round-table discussion sessions focussed on a) the pre-investment phase, and b) the ownership phase.
AP6’s managing director, Katarina Staaf, concluded after the event: “Learning and sharing best practices between peers is powerful in advancing industry practice around human rights.”
The event, hosted under Chatham House Rule, welcomed participants representing 20 different private equity firms investing in Buyout, Growth and Venture globally. AP6’s managing director and heads of the investment team participated in the event in addition to AP6’s sustainability team.
· Developing a robust approach to identifying and mitigating adverse human rights impacts is increasingly important for private equity investors.
· Currently most efforts are focused on the pre-investment phase while the post-investment phase still leaves room for defining responsibilities and advancing processes.
· Adverse human rights impacts can materialize in any geography or industry and in all parts of the value chain, upstream in the supply chain, through direct operations as well as downstream during the use of the product or service.
· Understanding the risk for potential adverse human rights impacts in verticals target to investment is essential to asking the right questions in due diligence pre-investment as well as during ownership.
LINKS TO FRAMEWORKS AND READING MATERIALS
Assessing and mitigating adverse human rights impacts is challenging but there is an increasing amount of research and guidance available on different sector applications as well as tools for implementation. The PRI, VentureESG and the B-Tech-project have recently published helpful guidance, listed below.